Scottish retail sales return to growth

Wednesday 17 August 2011 - Editorial Assistant

Scottish retail sales edged up 0.2 per cent on a like-for-like basis in July with food trading picking up after a tough June, according to the latest figures from the Scottish Retail Consortium (SRC) and KPMG.

Total sales increased 1.7 per cent year-on-year during the month, but the report indicates that there is still a significant weakness in consumer spending and confidence across the country.

Homeware products and big ticket items continued to struggle, while clothing & footwear sales were also down on last year, even though promotional activity ensured the category had a better month than was reported in June.

Concerns over public sector job cuts and other expected rises in unemployment are having an impact on shoppers’ willingness to spend money, and the SRC says that consumer confidence is much weaker north of the border than it is in the UK as a whole.

Richard Dodd, SRC Head of Media, commented: “This general return to sales growth is positive news for Scottish retailers but it shouldn’t detract from the underlying weakness in consumer spending.

“Shoppers continue to feel the impact of high levels of inflation and low wage growth as households’ real incomes shrink. The VAT increase and the effects of cuts have also dented consumer confidence.

“What growth there was in July came from food & drink, partly due to better weather later in the month but also to the effect of inflation on top-line growth. Sales of non-food goods fell for the third consecutive month as consumers shunned non-essential buying.”

Despite this tough trading environment, retailers are still committed to investing in Scotland and two large companies operating in the industry have established logistics hubs there in recent months.

Speaking in July, The Co-operative’s Group CEO Peter Marks said: “Our new regional DC is also a major investment in and commitment to the local community and will not only provide major employment locally but will also help further boost the local economy for many years to come.”